Proposition 13 was good for me and others who were lucky to have bought homes in California before 1978. Our property taxes have remained so low that even as our children have grown up and moved away it doesn’t make financial sense to move and find smaller but more expensive quarters.
But Proposition 13 also had some negative impacts. It meant less money for our schools and our cities. California public schools were once the envy of the nation. Since Proposition 13 they have fallen to 41st place in per student spending. When my youngest child was in high school, she was using the same science book that my eldest child used 10 years earlier. Classes became large and most of the excellent math and science teachers left for jobs in the more lucrative private sector.
During my first term on the elementary school board we were able to set the tax rate. We were very careful to set it low and there were no complaints from the community. Then came Proposition 13 and local public schools lost control of their funding and much more to Sacramento. School finance became very complex. It still is. Based on ever-changing formulas. California schools have remained drastically underfunded since the passage of Proposition 13.
Cities also had to increase fees as they saw a major source of revenue decline. That meant a course in the city’s recreation department which used to be free or entailed just a modest fee now was costly. Libraries closed on weekends until private funds were raised to keep them open. And the list goes on.
Californians have gotten used to Proposition 13 and any attempt to change it has met with fierce opposition. When Proposition 13 was on the ballot, it was sold as a way to allow the elderly to stay in their homes and not be priced out because of high property taxes. In truth, the biggest beneficiaries of Proposition 13 were owners of commercial property.
Now the League of Women Voters, the State PTA and a growing list of other organizations and officials are in the process of collecting signatures to put “California Schools and Local Communities Funding Act” on the ballot. Tax rates would remain uniform, but commercial and industrial properties would be reassessed every three years at market value, while residential properties would continue to be reassessed only when they sold. There would be exemptions for small business owners.
Proponents of the California Schools and Local Communities Funding Act of 2018, say the change initially would generate $11.4 billion, of which about $4.5 billion would go to K-12 schools and community colleges. That would increase state education funding by about 6 percent. A major portion would go to cities and counties. Since 1978, tax revenue per capita for cities and counties have fallen from $790 per person to $640, according to the Legislative Analyst’s Office. Property tax has shifted away from commercial/industrial to residential.
It’s tough to get something on the ballot unless you have deep deep pockets and it takes even more money to get a proposition passed. So far the efforts on behalf of this ballot proposition seem very grass roots. Major hitters like the California Teachers Association and the League of California Cities have yet to endorse. Other big names and rich donors have yet to pitch in. Still the group gathering signatures seems very optimistic. They have until June to gather 900,000 signatures. But they are out there every day (haven’t seen much action in San Mateo County but a lot going on in Santa Clara County, according to former Palo Alto mayor Nancy Shepherd, who is one of the major players in the state wide campaign). Supporters believe putting this before the voters inn 2020 when there is a presidential election will be perfect timing. Since the measure does not change the tax rate, it just needs a majority vote.
Proposition 13 was passed in June 1978, during Gov. Jerry Brown’s first term in office. It rolled back property assessments by 57 percent, limited tax rates to 1 percent of assessed value and limited annual property tax increases to 2 percent. It has caused inequities among new and older homeowners and among companies who continue to pay low taxes on buildings they’ve owned for decades while competitors with newer properties pay much more. It has created loopholes for corporations not available to the average homeowner. Despite these inequities, the law has wide support and has been difficult to modify. The question is whether this time voters will be willing to make a change.
Sue Lempert is the former mayor of San Mateo. Her column runs every Monday. She can be reached at sue@smdailyjournal.com.
(4) comments
Beware, this is only the first step to dismantle Prop 13. The proponents of this initiative will not stop until Prop 13 is completely dismantled.
The exemption for small businesses is very narrow and will impact many mom and pop businesses such as your local coffee shop and favorite restaurant because many of the businesses rent their spaces under "triple-net" leases which means the property owner passes along the cost of all taxes to the renter, i.e., proprietor. Moreover, this will only worsen the economic landscape for many retailers are already facing an uphill battle with internet competitors.
If there was ever a wolf in sheep's clothing this is it.
The answer to education funding is a user fee. If you have a child in public education, there should be a $500/year fee to help offset the cost of educating your child. This will increase revenue and will also create more of a buy-in from parents who have to now shell out money for their child. Until public education opens up its books and allows more parent involvement in education decisions, no money from taxpayers and that includes those who own real estate. Regarding prop 13, it's funny that the ones who complain the most about it are the ones that demand more and more of your money. Sorry Sue- look for another way to fund public education in California, the taxpayer is tapped out.
Apparently you do not realize that parent contributions to education are already being made - the goal in Belmont/Redwood Shores is $1500 per student, for example.
That's a suggested,voluntary contribution. His point is to charge mandatory fees to public school students/parents.
As far as prop 13, where in the Bay Area, houses average $1,000,000 +, $12,500 + in property tax a year is not enough?? how about cutting into School District employees/administrators wages to cut costs? or at least spread the enormous wealth of the admin to the actual Teachers.
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